Mumbai

At a time when shopping malls across Western economies are grappling with declining footfalls and large-scale closures, India is witnessing a sharp reversal of global retail trends, drawing increasing attention from international investors, according to real estate consultancy firm Anarock.

While the United States has seen nearly 1,200 mall store closures since 2020—forcing close to 40 per cent of vacant malls to be repurposed or rezoned—India’s retail real estate sector is experiencing renewed momentum, supported by robust consumer demand and rising institutional investment, the firm noted.

Anuj Kejriwal, CEO – Retail Leasing and Industrial & Logistics at Anarock Group, said Indian shopping malls are expected to attract capital inflows exceeding USD 3.5 billion over the next three years. He added that more than 88 international retail brands have already entered the Indian market and are actively pursuing expansion.

“Several global brands are currently in the pipeline, but availability of Grade-A retail assets remains severely constrained,” Kejriwal said, highlighting the supply-side challenges in India’s organised retail segment.

Contrasting sharply with Western markets, India’s retail growth is being driven by a large young population, rising disposable incomes, and limited penetration of organised retail. Supportive foreign direct investment (FDI) policies have further strengthened investor confidence, Anarock observed.

One of the key factors fuelling interest in Indian retail assets is the acute shortage of high-quality retail space. Anarock pointed out that India’s per capita retail stock remains among the lowest globally, especially when compared to countries such as the US and China.

“This structural gap, coupled with the fact that India’s per capita income has nearly doubled over the past decade, has created an exceptional demand-supply imbalance,” Kejriwal said.

According to the consultancy, premium malls across major Indian cities are operating at near-full capacity, with occupancy levels ranging between 95 and 100 per cent. Many such properties now have long waitlists, while rental values have surpassed pre-pandemic levels. Notably, leasing cycles in several projects are progressing faster than construction timelines—an uncommon phenomenon globally.

Anarock also noted that India’s consumption-driven growth story continues to gain strength, with the country projected to become a USD 6 trillion consumption economy by 2030. Unlike malls in Western economies, Indian malls function as social and lifestyle hubs, offering entertainment, dining, and community experiences beyond pure retail.

Footfalls in prominent malls often exceed 20,000 visitors on weekdays and cross 40,000 on weekends. Food and beverage outlets and entertainment zones account for nearly 30–35 per cent of total foot traffic, creating a diversified and resilient retail mix.

The firm further highlighted that Indian malls have not been undermined by e-commerce growth. Instead, they are benefiting from it, as online retail penetration in India remains around 8 per cent—significantly lower than the over 20 per cent penetration levels seen in the US and China.

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This unique convergence of demographics, consumption growth, and limited organised retail supply continues to position India as a standout destination for global retail investment, Anarock said.